BHP (ASX, LON, NYSE: BHP) said on Tuesday it had inked a deal to support the development of new solar and wind farms in Australia鈥檚 Queensland state as part of a company-wide effort to use more renewable energy.
The miner, which runs nine metallurgical coal operations in the Bowen Basin through its BHP Mitsubishi Alliance (BMA) and BHP Mitsui Coal (BMC), said the move would help it cut its indirect emissions in the country by 20% over five years.
The agreement with state-owned generator and retailer CleanCo comes as BHP prepares to update the market next week on a revamped strategy to reduce the company鈥檚 operational emissions and its use of diesel.
Deal with Queensland state-owned generator and retailer Clean Co will see聽BHP coking coal mines use more renewable energy and is the first of its kind for the company in Australia
The 鈥渧ery tangible鈥� climate actions will include targets to cut operational emissions by 2030, part of the world鈥檚 largest miner鈥檚 broader commitment to become carbon-neutral by 2050.
BHP said the steel-making coal it produces in central Queensland will be exported and does not count towards the company鈥檚 net-zero target.
鈥淭his is an important step forward in BHP鈥檚 transition to more sustainable energy use across our portfolio, and a first for our Australian operations,鈥� BHP鈥檚 President, Minerals Australia Edgar Basto said in a statement.
BMA is Australia鈥檚 top producer and supplier of coking coal. The unit is a 50:50 partnership between BHP and Mitsubishi Development and operates seven mines 鈥擥oonyella Riverside, Broadmeadow, Daunia, Peak Downs, Saraji, Blackwater and Caval Ridge. BMA also owns and operates the Hay Point Coal Terminal near Mackay.
BMC has two open-cut metallurgical coal mines in the Bowen Basin 鈥� South Walker Creek and Poitrel.
The company intends to power half the electricity it needs to run those mines from low emissions sources, mainly solar, wind and hydro backed up by gas.
BHP currently sources 100% of the power it uses from the largely coal-fired Queensland grid.
Five-year deal
The renewable power purchasing agreement with CleanCo will run for five years from January 1, 2021.
It will support the development of new solar and wind farms in Queensland 鈥� the solar Western Downs Green Power Hub, due for completion in late 2022, and the Karara Wind Farm slated to begin operations in early 2023.
BHP is pursuing similar renewables supply deals for its iron ore operations in Western Australia and its Olympic Dam in South Australia.
The company already has four power agreements in Chile aimed at running its operations the country, including the Spence plant, and Escondida, the world鈥檚 largest copper mine,聽entirely on renewable power.
The聽Melbourne, Australia-based giant is also聽aiming to eliminate the use of water聽from aquifers in Chile by 2030.
Spence, a desalination water plant with a capacity of 1,000 litres per second, was expected to support a聽$2.5 billion expansion. The project, originally slated to be completed by the end of this year, was recently deferred until early 2021 due to effects of the coronavirus pandemic,聽BHP said in April.
At Escondida, a second desalination plant was commissioned in 2017 with a maximum capacity of 2,500 litres per second. Additional upgrades, plus the connection of the original desalination plant to this conveyance system will further increase total capacity.
Chile鈥檚 environmental watchdog聽said in July聽it would charge Escondida with drawing more water than its permits allowed for nearly 15 years.